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Personal Finance News 12/2009



Home Lenders Face Sanctions Over Failed Modifications (BusinessWeek)
BusinessWeek - (Bloomberg) The U.S. Treasury Dept. will begin taking action against lenders that aren't doing enough to ease mortgage payments for troubled homeowners as part of the Obama Administration's $75 billion pledge to curb foreclosures. Lenders> The> The> "We> Seriously>The> The> Eligible> Mortgage> The> A>Robert> One> The> Bank> "As> The>

A Lesson From AIG: How to Fix the Fed (U.S. News & World Report)
U.S. News & World Report - Of all the villains responsible for the Great Economic Wipeout, the Federal Reserve is pretty far down the list. It's certainly behind members of Congress who deregulated the banks in 1999, allowing once staid institutions to gamble recklessly. Then there are notorious CEOs like Martin Sullivan of AIG, Angelo Mozilo of Countrywide Financial, and Richard Fuld of Lehman Brothers whose greed and hubris wrecked their companies. Crooked mortgage brokers, rapacious Wall Street traders, and millions of irresponsible homeowners were key supporting actors in the revolting drama, too.

Home Lenders Face Sanctions Over Failed Modifications (BusinessWeek)
BusinessWeek - (Bloomberg) The U.S. Treasury Dept. will begin taking action against lenders that aren't doing enough to ease mortgage payments for troubled homeowners as part of the Obama Administration's $75 billion pledge to curb foreclosures. Lenders> The> The> "We> Seriously>The> The> Eligible> Mortgage> The> A>Robert> One> The> Bank> "As> The>

Vanguard: 60 percent of 401k accounts recovered (AP)
AP - Another major provider of 401(k) accounts says the typical retirement saver now has more money in their account than they did before the stock market began tumbling two years ago.

General Growth to emerge from Ch. 11 bankruptcy (AP)
AP - General Growth Properties Inc. said Wednesday lenders have agreed to restructure about $9.7 billion in debt under a plan that will allow the nation's second-largest shopping mall operator to emerge from bankruptcy protection by the end of the year.

Fed's Lacker flags need for exit, favors asset sales (Reuters)
Reuters - The U.S. Federal Reserve must remain alert to lurking inflation risks, and could begin removing monetary stimulus by selling some of the mortgage debt it acquired during the financial crisis, a top central bank official said on Wednesday.

MSU: Michigan population loss cost $4.4 billion (AP)
AP - Michigan has lost $1.9 billion in economic activity and $2.5 billion in home equity value in three years because of population declines in 63 of its 83 counties, according to a Michigan State University study.

What the FHA's New Criteria Mean for Housing (U.S. News & World Report)
U.S. News & World Report - After the real estate crash decimated the mortgage market, a tiny government agency has assumed an outsize role in the housing recovery. In 2006, the Federal Housing Administration--which insures home loans against default--backed just 3 percent of new home-purchase mortgages. But today, the agency insures nearly 3 out of every 10 new home loans. That's because while banks have raised their lending standards, credit requirements for FHA-backed loans have remained fairly liberal. ...

U.S. mortgage rates fall to record low: Freddie Mac (Reuters)
Reuters - U.S. mortgage rates dropped to a record low in the latest week, as rates fell for a fifth straight week, a closely watched mortgage survey showed Thursday.

Rates on 30-year mortgages set new record low (AP)
AP - The average interest rate for a 30-year mortgage dropped to a record low of 4.71 percent this week, pushed down by an aggressive government campaign to reduce borrowing costs.

Getting a Mortgage in 2010: 10 Things to Know (U.S. News & World Report)
U.S. News & World Report - More than three years into a painful housing crash, the real estate market has sent recent--albeit tentative--signs of stabilization. Home sales have increased, inventory levels are down, and price declines have become less precipitous. Along with more affordable home prices and a tax perk from Uncle Sam, attractive mortgage rates--which remained below 5 percent as of late November--have been a driving force behind this development. The availability of low mortgage rates will play a decisive role in the performance of the 2010 housing market as well. ...

HRPT Properties closes on $175 million mortgage (AP)
AP - HRPT Properties Trust on Friday said it completed a new mortgage financing for $175 million, and plans to use the proceeds to reduce outstanding debt under its revolving bank credit facility.

Oklahoma man sentenced for money laundering (AP)
AP - An Edmond man has been sentenced to 30 months in prison for money laundering.

ALL BUSINESS: Help needed for underwater mortgages (AP)
AP - Stop paying your mortgage.

Riso replaces Kellman as Care CEO (AP)
AP - Care Investment Trust Inc., a real estate investment trust that invests in healthcare-related real estate and commercial mortgage debt, said Friday that Salvatore Riso Jr. had become chief executive officer.

Quarter in U.S. foreclosure plan late on payments (Reuters)
Reuters - More than one-quarter of homeowners receiving help under a U.S. government foreclosure prevention plan are behind on their new mortgage payments, a Treasury Department survey has found.

Ahead of the Bell: Consumer Credit (AP)
AP - Consumers likely borrowed less for a record ninth straight month in October as households faced tight credit conditions and unemployment that hit a 26-year high. A further decline in borrowing would be more evidence of weak consumer spending, making it harder for the economy to mount a sustained rebound.

Mortgage Rates in U.S. Decline to Record Low (BusinessWeek)
BusinessWeek - (Bloomberg) -- Mortgage rates for fixed 30-year loans in the U.S. dropped to a record low amid signs that the housing market is beginning to emerge from the worst slump since the 1930s.

FHA Mulling More Stringent Mortgage Rules (BusinessWeek)
BusinessWeek - Home buyers might soon have to bring more cash to the table to qualify for Federal Housing Authority-backed mortgages. The FHA mortgages, which now make up 30% of originations, have surged in popularity because borrowers need a down payment of just 3.5% to qualify, but the housing crisis has battered the agency's reserves.

Bank of America says 600,000 mortgages modified (AP)
AP - Bank of America Corp. said Monday it has provided mortgage relief through loan modifications for more than 600,000 homeowners since January 2008.

Court upholds sentence in mortgage fraud (AP)
AP - A federal appeals court on Monday dismissed a request to open a hearing into extending the prison sentence of mortgage broker Nelson Miller, who was convicted in January 2008 of fraud and conspiracy to commit fraud.

Few borrowers getting permanent mortgage relief (AP)
AP - Executives at two of the nation's largest banks say they are struggling to get homeowners to complete the necessary paperwork for the Obama administration's mortgage relief plan, and only a fraction of homeowners have finished the process.

SEC charges ex-N.Century execs in subprime case (Reuters)
Reuters - Three former executives at now-bankrupt lender New Century Financial Corp were charged with fraud by U.S. securities regulators on Monday, the latest government effort to pursue wrongdoing in the subprime mortgage market.

SEC accuses 3 ex-New Century execs of fraud (AP)
AP - Federal regulators on Monday accused three former top executives of collapsed mortgage lender New Century Financial Corp. of fraud, saying they misled investors and inflated profits as the company's subprime loan business was failing in 2006.

NC bank panel hears comment on new mortgage rules (AP)
AP - Banks and anyone else with an interest in how new North Carolina mortgage laws are applied have an invitation to sound off.

Lawmakers impatient with Obama mortgage plan (AP)
AP - Only one in three homeowners who have signed up for the Obama administration's mortgage relief plan have sent back the necessary paperwork, highlighting continuing problems for the government's effort to stem the foreclosure crisis.

JPMorgan CEO: Bank sees more mortgage losses (AP)
AP - JPMorgan Chase & Co.'s CEO said Tuesday that the bank sees additional losses on home loans next year even as the economy shows slight improvements.

JPMorgan sees consumer losses rising (Reuters)
Reuters - JPMorgan Chase & Co sees additional losses on credit cards and home loans next year although there are some signs the rate of losses is settling and it may not need to build credit reserves much further, Chief Executive Jamie Dimon said on Tuesday.

SEC sues head of defunct Brookstreet Securities (AP)
AP - Federal regulators have sued a defunct California investment brokerage and its former CEO, accusing them of fraud in selling more than $300 million worth of risky mortgage-backed securities to unsophisticated investors.

US charges 5 with foreclosure scam in Philly area (AP)
AP - Five people were charged with using a supposed mortgage-rescue program to steal nearly $15 million in home equity from homeowners facing foreclosure in suburban Philadelphia.

Mortgage application volume rises 8.5 percent (AP)
AP - Mortgage application volume increased 8.5 percent during the week ending Dec. 4, as more borrowers refinanced loans to lock in interest rates near record lows, according to a report Wednesday from the Mortgage Bankers Association.

Lawmakers want to extend $31B in tax breaks (AP)
AP - Lawmakers want to extend $31 billion in popular tax breaks, including an income tax deduction for sales and property taxes. The problem: how to pay for it.

GOP gov candidate announces Illinois finance plan (AP)
AP - Republican candidate for governor Andy McKenna proposed dramatically cutting state spending to rescue Illinois' finances without an income tax increase.

U.S. mortgage applications driven up by refinancings (Reuters)
Reuters - Demand for U.S. home loans rose last week to the highest level in about two months, mostly from borrowers taking advantage of low mortgage rates to refinance, the Mortgage Bankers Association said on Wednesday.

Only 10K permanent loan modifications as of Oct. (AP)
AP - Only about 10,000 homeowners received permanent loan modifications this fall under the Obama administration's mortgage relief plan, more evidence of serious failings in the government's effort to stem the foreclosure crisis.

Wholesale inventories, mortgage demand rise (Reuters)
Reuters - U.S. wholesalers started restocking in October for the first time in more than a year, suggesting the economy could get a lift as a long-running effort by businesses to pare inventories reaches an end.

SL Green Realty buys mortgage of 510 Madison Ave. (AP)
AP - SL Green Realty Corp. said Wednesday it bought the first mortgage loan secured by property at 510 Madison Ave in New York from Union Labor Life Insurance Co.

3 arrested for Newport Beach home invasion (AP)
AP - Three men were under arrest and two other suspects were at large Wednesday after a violent robbery at an Orange County mansion owned by the founder of a collapsed subprime mortgage lender.

House votes to extend $31B in expiring tax breaks (AP)
AP - The House voted Wednesday to extend $31 billion in popular tax breaks, including an income tax deduction for sales and property taxes, to be financed with a tax increase on investment fund managers and a crackdown on international tax cheats.

Lenders take over NJ's 1st casino for nonpayment (AP)
AP - Don't pay your mortgage, and eventually the bank will own your home.

Foreclosure filings fall 8 percent in November (AP)
AP - The number of homeowners on the brink of foreclosure fell in November, the fourth straight monthly decline, as mortgage companies evaluated whether borrowers were eligible for help.

Ariz. AG, bank execs meet about mortgage crisis (AP)
AP - Arizona Attorney General Terry Goddard will be in Washington on Thursday to meet with executives from some of the nation's largest banks.

Treasury: housing aid to push TARP losses up (Reuters)
Reuters - The Treasury Department said on Thursday that losses from the government's $700 billion financial rescue fund are likely to rise as disbursements to battle mortgage foreclosures increase.

U.S. fixed mortgage rates climb from record lows (Reuters)
Reuters - U.S. fixed home loan rates edged above record lows in the past week, tracking bond yields higher following surprise improvement in November employment, home funding company Freddie Mac said on Thursday.

Share some financial lessons with these gift ideas (AP)
AP - While others are blowing their holiday budgets, you can set an example and send a message by giving a gift with a focus on personal finance.

Emerging markets too hot? Try mature economies (AP)
AP - Spicy numbers make it easy to see emerging markets' allure: The average Latin American stock fund has more than doubled this year.

BlackRock plans hedge fund for U.S. retail clients (Reuters)
Reuters - BlackRock Inc plans to launch a new portfolio giving wealthy individual investors access to normally difficult to obtain hedge funds, the asset manager said in a regulatory filing on Thursday.

Mortgage rates still below 5 percent (AP)
AP - Mortgage rates rose this week but still remained below 5 percent, Freddie Mac said Thursday.

Gov't mortgage plan provides little permanent help (AP)
AP - The Obama administration's embattled mortgage relief plan has provided permanent help to only 4 percent of borrowers who have signed up, weak results that could threaten the housing market's recovery.

Stocks vs. Bonds: Tax Strategies, State by State (BusinessWeek)
BusinessWeek - It's a given for many academics and investors that over the long run stocks outperform bonds. But those in the top tax bracket may want to rethink that axiom, especially if they live in states with high income tax rates. That's because for tax purposes, most states generally don't treat stock gains or dividends any differently than ordinary income.



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